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The Journal Editorial Report

News/Business. Paul Gigot discusses news, politics, society and finance. New. (CC) (Stereo)

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Romney 9, Florida 3, Virginia 3, Colorado 3, Mitt Romney 2, James Freeman 2, Dan 2, Wisconsin 2, Hahaahahaha 2, Obama 2, U.s. 2, Washington 2, Steve 2, California 2, Michigan 2, Paul 2, Kim 2, Geico 2, Rzr 2, Polaris 2,
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  FOX News    The Journal Editorial Report    News/Business. Paul Gigot discusses news,  
   politics, society and finance. New. (CC) (Stereo)  

    October 27, 2012
    2:00 - 2:30pm EDT  

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>> this week on "the journal editorial report." with just ten days left the presidential candidates do the swing state sprint. polls tighten amid a new narrative mitt romney's momentum may not be real. and the president taking credit for positive economic aiders. and what will january's looming tax increases do to those signs of life? and a measure on the ballot in michigan could hand unions their biggest victory in years. will they make collective bargaining a constitutional right? >> welcome to "the journal editorial report." wifeless than two weeks to go, president obama and mitt romney
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hit the campaign trail in florida, ohio, wisconsin, colorado, and virginia. polls continue to show the race in a dead heat nationally, and too close to call, in no fewer than ten swing states but the obama campaign and its media allies are questioning whether mitt romney's recent momentum is real. joining the panel his week, dan henning gary, james freeman, dorothy rabinowitz and kim strassel. kim, tell us how real the romney surge is. >> look, paul, i know two weeks is one side increasing its advantage in both the national polls and the swing state polls. that's romney. we have seen money flowing into that side. that's romney. we have seen him improve his performance in independents and womens. you can call it what you want
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and the media contends it isn't momentum but i bet the president's campaign is wishing they that that momentum. >> to that point, yes, the obama campaign wishes it had some of that momentum because i tell you what really going on. the president is flatlining. >> i think he hit a ceiling for two reasons. his approval rating hit a ceiling as far back as april. this president has been around 47 or 48% all through the year. there's no lift to the obama presidency, and now that he and romney have come together in both the national and these tight swing state polls you see no lift at all in the obama camp pain, -- campaign. >> here's the argue. they make. he is still ahead in ohio and wisconsin, still ahead in what they call their fire wall. and even if you give romney all the swing states that they think they're going to win --
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virginia, north carolina, florida -- that still only gets him to 248. throw the colorado, 257 electoral votes, needs 2 70 to win. >> couple things about the firewall. you have to question, is obama really ahead in ohio when everyone seems to acknowledge romney's big advantage among independents? this is true of a bunch of swing states. there's a question about who is really ahead. but the other issue is, this is a well-known incumbent late in the race. he is probably persuaded most of the people he is going persuade and his campaign speeches are telling you that. it's a fiercely partisan ideological message he is driving. he is not talking to independents. >> let's get a clip of that. we want to give you an illustration of what james just pointed out. >> not a five point plan by governor romney, one-point plan. folks at the top get to play by
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their own rules pay lower tax rates than you do. outsource more jobs, let wall street run wild, and if this plan sounds familiar, it's because we tried it. governor romney knows this. he knows this plan isn't any different than the policies that led to the great recession. so, in the final weeks of his election, he is counting on you forgetting. what he stands for. he is hoping that you, too will come down with a case of what we like to call romnesia. >> romnesia. i've got it, you've got it. what do you think of that? >> well, what are we looking at here? we have to acknowledge the president is a very angry man. that has been there evidently since that debate. all along -- >> always been such a cool customer. that's been his great appeal to so many people. helped him in 2008 against john
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mccain, who seemed so frenetic with the financial crisis. obama, mr. cool, mr. laid back. looks like he is calm in a crisis. you're saying this is a different obama we're seeing? >> yes. when the sun is shining, reality is different. what happened is that we heard the mantra for a long time now. we always knew this would be a close race. well, maybe his handlers did but obama never did. you have to believe inside. now came denver. he began to understand, this is reality. he is in danger of losing, and everything that supported him, all of that sense of vast crowds, imagine what happened yesterday in colorado. i you took a look admit mitt's immense crowds, that evehicled the same tremendous passion that obama had, only it was mitt romney. so you have this enraged president. and it comes out he can't stop, just as biden cannot stop, you cannot stop behaving
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inappropriately. >> dan. >> the president's campaign but out a 20-page pamphlet. >> a big part of this week, saying, i do have an agenda, responding to the romney criticism that he doesn't for the second term. >> exactly. and senior democrats have been saying that because romney put out this substantive economic plan, the president actually has to begin defining his own. he goes on this stump and does he talk about senate no. he does what we just saw on speech after speech. i honestly think that barack obama harbors some deep personal animosity toward mitt romney. he can't stop doing that even as his advisers say go in another direction. >> kim, what's the strategy here that the obama campaign is working? >> well, it's what they have been doing all along. it's class warfare, it's fear. the argue. has always been for obama, things are not necessarily as great as he would like them but we're making progress, and trust me, the other guy will be much, much worse. so it's the argument of stick
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with the devil you know rather than the one you don't, and that's what you're going to be hearing in the swing states, going to be playing off a certain fear and the economic anxiety that people feel today. trying to make them worry about what would come with a romney presidency. >> dorothy, what about the argument we hear from our friends on the left, this is romney's now surging because it's moderate mitt disavowed his pass. >> these are desperation tactics. this is not tactics. obama can't help it. his has been destabilized and making errors. those people are out there, it's the last resort to say, it's not real. you have it everywhere now, and i think it will do no good. facts are not going to be changing. >> moderate mitt changed? >> i think what -- part of the success of the first debate, the big romney victory, he finally to the delight of conservatives and free market fans, made an argument for economic freedom and talked about the difference
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between the real economy that mitt romney participated in and succeeded in and the solyndra economy of president where you fund favored enterprises. >> when we come back president obama revamps his stump speech, taking credit for recent positive signs in the economy. but is our outlook that rosy? our panel takes a closer look next. oo....hahaahahaha! oh...there you go. wooohooo....hahaahahaha! i'm gonna stand up to her! no you're not. i know. you know ronny folks who save hundreds of dollars switching to geico sure are happy. how happy are they jimmy? happier than a witch in a broom factory. get happy. get geico. fifteen minutes could save you fifteen percent or more.
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the economy is growing at a sluggish 2% and weak corporate earnings leading to one of the biggest dow selloffs of the year, we're back with dan henninger, and dan freeman, and mary anastasia o'grady. >> steve, happy days are here again? >> yeah. hardly. the problem with the speech that president barack obama showed is nobody really believes that, paul, and these new numbers on gdp show that this is an economy that is still suffering from what i call chronic fatigue syndrome. just isn't picking up the way normal recovery would. and what we're seeing in the gdp numbers, we're also seeing it in the jobs numbers. this is a recovery, if we can use that word, that's about half the pace of a normal recovery, and that's the reason you still have four million fewer workers
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today with jobs than you did in 2007. this is a really lousy recovery. >> but, mary, we're seeing some ac segue racing from -- acceleration. fears of a recession seem at least for now to be put aside. so, 2% is not great, but on the other hand it's something. >> well, it tells you something that 2% makes you feel like spiking the football because the expectations at this point are so low. but there are a lot of other signals that are coming that suggest that the 2% is not just some kind of short-term malaise. looking forward, you have business investment that is very weak. >> very weak. >> you have, for example, mexican exports to the u.s. were stagnant for the last two months, and that tells you something about demand in the u.s. you do have some pickup in consumer confidence -- >> that's -- where is that coming from? coming from housey, where ben
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bernanke is shoveling all the money -- >> chairman of the federal reserve. >> right, into the credit markets and creating money to try to keep interest rates low. that helps housing but that's not a recovery. >> you think the buoyancy is related to the artificial stimulus easy money. >> it's gone into the stock market and helped pump up the stock market since the beginning of the year to the peak this year, up over 16%. that makes people people good. >> home owner james freeman you love housing recovery, but it seems to be here. the president was talking about it. you see housing markets flat and up. >> there's some people out there saying maybe we're not out of the weeds on housing. you mentioned the slow growth economy. this is a political question now, whether the president can get people to accept a new normal of slow slower growth,
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less opportunity. the other story is the resiliency of american business, and this is maybe a positive sign if we gate change in policy direction in washington. they've really adapted well to this environment. very challenging the last few years. but the problem now is you need the topline growth, increases in sales. they're not getting them. so it's a question of how much more can they cut. >> corporations really stripped down they're expenses and squeeze profits out of the last couple of years, but as james says, if you can't grow revenue after a certain point you can't grow profits. >> that's right. dow chemical just announced they're going to lay off 2,400 people. that's a lot of layoffs, a lot of people getting fired, banks are doing the same thing. i think steve raised a good point. recovery. the recession ended the middle of 2009. three years later are we still supposed to be talking bat recovery? we should be talking about a normal economy. the post war growth rate for the
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united states economy is about 3% or a little bit better. a point below that is not going to create an economy that creates jobs for all those people who stopped looking for work. and i think there really is a serious question of whether obama's new normal is in fact a 2% economy, given the fiscal policies that he has put in place and will be pursuing in a second term. >> dan, let me add something to that. something interesting in the report. we're just getting preliminary glimpses and this is just a snapshot. it appears that in guess what sector is starting to pick up? government. the government appears to be -- that one of the fastest growing sectors of the economy. that's not where i think americans want to see the growth. one other quick point. paul over the last two years the sector of the economy created the most jobs has been the oil and gas industry. the very industry that barack obama has been trying to hold back.
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>> now he is saying, i'm all in favor of that. i'm a big backer of that. which if that happened in a second term would be a good thing. >> well, if we have a bubble in energy prices, you know, that great job creator may not be there. >> natural gas is no bubble because the supply is so enormous. take your point on gasoline otherwise. well, president obama may be touting an economic turn-around, but will whatever progress we have made come to a halt in january with that so-called tax cliff looming. americans are set to face a tougher 2013. just picking up so, brochures, posters copies of my acceptance speech. great! it's always good to have a backup plan, in case i get hit by a meteor. wow, your hair looks great. didn't realize they did photoshop here. hey, good call on those mugs. can't let 'em see what you're drinking. you know, i'm glad we're both running a nice, clean race. no need to get nasty. here's your "honk if you had an affair with taylor" yard sign. looks good.
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>> well, president obama may be touting economic progress in his push for re-election but making no mention of what else comes with the second term. a whopping $500 billion in tax
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increases. just part of what's in store for january if the president's policies take us over the so-called fiscal cliff. so, james, really, one of the biggest tax increases since 1980 facing us. >> huge. >> if, under current law, nothing is done. we have a list of these tax increases. >> the lowlights. >> yes. expiration of the bush cuts, a lot of the tax increase. the personal income tax brackets which are now going to pop up again, taxes on investment, a lot of of the obamacare taxes, 22 billion starts this year. that includes the new tax on investment there. >> 3.8% on people who make above $200,000, and medical devices, one of the most -- a real growth industry. >> i mean, that's one of those that you can't figure out how that became law but it did and we have to live with it. i want to emphasize, we get idea to talking about ten-year plans.
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this is in 2013, 500 billion -- you're talking about a tax increase of over 3% of gdp. so this is a massive blow to the economy that is going to happen unless congress acts or we get a new president with a new direction. >> steve, you talked to a lot of people in the business community. how are they reacting to this prospect? is this affecting the chance we could go over this tax? is it affecting their investment decisions? >> no question about it. trepidation, the two tax increases that trouble me the most as an economiess, the capital gain tax goes from 24 to 60%. what kind of taxes are those? direct tacks on business investment. we talked about how businesses are retracting in terms of investment. i can't think of a worse thing to do to the economy right now than raise those taxes on
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business investment because that's really lagging in the economy. saving and investment are building blocks of the economy, it's hard to see how the economy is going to grow with the big tax sledge hammer in january. >> here's how to the president would respond. the taxes are on rich people. they can tolerate it. no big deal, and i get in. i'll work, i will sit down with republicans republicans republican eliminate the tax increases on people under $200,000 a year, and those are the real drivers of the economy because they spend money. as long as we take that portion of the tax increase off the table, the other tax increases, no sweat, will not hurt the economy. >> you just described barack obama's view of the economy. but -- >> i think i did it fairly. >> but one of the big problems is that people who are these so-called rich people are people who use their excess capital to employ other people. so, it will impact the job
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creation in the country. the other thing that seems like he really doesn't understand is that, first of all, 200,000 didn't an individual earning 200,000 is not -- whenever he talk about the millionaires and billionaires. >> two earning couples and a lot of high cost states don't feel rich. >> that's the middle class family, and a lot of people own stocks in their pension accounts so those people are very middle class people and they're going to get hit with the taxes. >> the important point to stress, dan, is unless congress acts and the president signs it, whether the president is mitt romney or barack obama, these tax increases are going to take place. so something has to give or we all jump off that cliff together. >> not only do we all jump off. it's interesting the way we talk about this as the -- as though it was one country. it's $500 billion of capital being taken out of the country and sent to the federal government's budget.
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the tax foundation has taken a look at the effect this is going to have on the states, and the wealthiest, biggest producing states, california, new york, texas, and florida, are going to be the biggest revenue losers because of that money being taken from them and sent to washington. and you have a state like california where the governor is trying to engineer a tax increase on top of that. how this cannot have a depresssive effect on the economy is hard to see. >> i think we also know the super wealthy know how to work the tax system. so unless there's fundamental tax reform that gets rid of a lot of the loopholes and tax advantages, someone who is very wealthy can use, you're not going to collect those revenues. more of the same with basically middle income class people getting hit. >> which of the tax increases won't take place if mitt romney is elected? >> romney said he doesn't want the big hikes on income or investment. >> going to repeal obamacare.
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>> also saying he wants tax reform to bring down the corporate rate to something roughly competitive with the world. i think the hope is that you would probably see if romney is elected, a postponement of the big fiscal decisions. the tax increase would not hit january 1. >> would not hit right away. >> big tax choice in this election. coming up in the second half hour, with just ten days to go, the presidential race could come down to a small group of voters in a small group of states. here's why all eyes should be on suburbia, president obama says the military cut set for january won't happen, and weren't his idea in the first place, but will voters in virginia and other defense states buy what he is selling come election day? >> a measure on the ballot in michigan seeks to enshrine collective bargaining rightness the state's constitution and give a boost to unions nationwide.
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